April 21, 2020

2nd Fiscal Period (Ended February 2020)
Financial Results Briefing Materials

AssetManagement
CompanySANKEI REAL ESTATE Inc.

Table of Contents
Executive Summary…… P2

1. Management Highlights…… P3

2. Future Growth Strategies…… P122-1 External Growth Strategy…… P13

2-2 Internal Growth Strategy…… P15

2-3 Financial Strategy…… P17

2-4 ESG Initiatives…… P19Appendix…… P20Disclaimer
This document is intended for the purpose of providing information on SANKEIREAL ESTATE Inc. (hereinafter, “SANKEI REAL ESTATE”), and is not intended forthe purpose of soliciting investment in or recommending the trading of specificproducts. Please consult your securities company for any purchase of SANKEIREAL ESTATE investment units. When making any investment, investors do so attheir sole discretion and risk. The information provided in this document is ananalysis or a judgment made by Sankei Building Asset Management Co., Ltd.
(hereinafter, “Sankei Building Asset Management”) based on information
currently available to Sankei Building Asset Management, and Sankei Building
Asset Management does not guarantee and is not liable whatsoever for theaccuracy, reliability, integrity, etc. thereof. In addition, the content may bechanged or abolished without prior notice. The content of this document
contains earnings forecasts and other forward-looking statements. These
forward-looking statements are not a guarantee of future business performanceor financial content of SANKEI REAL ESTATE. All rights to any part of thisdocument belong to Sankei Building Asset Management, and no part of thisdocument shall be used, cited, reproduced, altered, disassembled, transmitted,
etc. by any means, electronic or mechanical, for any purpose without
permission. This document is not a disclosure document based on the Financial
Instruments and Exchange Act. Please contact below if you have any inquiries
concerning this document.
SANKEI BUILDING ASSET MANAGEMENT CO., LTD.
Finance & IR Department
Phone: ＋81-3-5542-1316

1

SANKEI REAL ESTATE Inc.

Executive Summary
Management Highlights• Promote the expansion of asset size with portfolio maintaining quality.
• Portfolio operated with 100% occupancy rate. Rent revision for office buildings produced
favorable results.
• 2nd FP performance:
Distribution per unit was 2,995 yen, up 1,596 yen (+114.1%) from the end of the 1st FP
and up 306 yen (+11.4%) from the initial forecast.

Future Growth Strategies• External Growth Strategy:
Will seek external growth opportunities while carefully assessing real estate investment
market conditions, etc. without changing the policy to expand asset size.
• Internal Growth Strategy:
Will continue to focus on realizing internal growth to reduce rent gap even when theexternal environment is uncertain.
• Financial Strategy:
Will work to promote the extension of average remaining time to maturity, improvementof the ratio of fixed interest rate and diversification of maturity date, while maintaining astable financial base through lender composition centering on mega banks.
2

SANKEI REAL ESTATE Inc.

1. Management Highlights

3

SANKEI REAL ESTATE Inc.

External Growth in 2nd Fiscal Period (Ended February 2020) (1)Expansion of Portfolio Maintaining Quality
1st Fiscal Period(Ended August 2019)

2nd Fiscal Period(Ended February 2020)

Number of properties

8 properties

11 properties

Asset size
(Total acquisition price)

Approx. 43.4 billion yen

Approx. 67.3 billion yen

Acquisition price /property

Approx. 5.4 billion yen

Approx. 6.1 billion yen

Average appraisal NOI yield

4.2%

4.2%

Average occupancy rate

100.0%

100.0 %

Portfolio PML

1.6%

1.6%

Investment ratio byasset type(on acquisition price basis)

Investment ratio by geographic
area(on acquisition price basis)

Office buildings 79.4%
Sub assets
20.6%

Office buildings 80.8%
Sub assets
19.2%

Focused investment area
100%

Focused investment area
94.1%

Tokyo 23 wards 80.2%
Osaka City
19.8%
Others－Tokyo 23 wards 74.6%
Osaka City
19.5%
Others5.9%* The figures are the weighted average based on the acquisition price of each property with net operating income derived by direct capitalization
method stated in the real estate appraisal report as the base, with the appraisal date of the end of each fiscal period.

4

SANKEI REAL ESTATE Inc.

External Growth in 2nd Fiscal Period (Ended February 2020) (2)Relatively High Competitive Advantage of Portfolio

Close

New

Large

Percentage by
Walking Time to the Nearest Station*1

Percentage by
Building Age*1

Percentage by
Typical Floorplate*1(As of end of February 2020)
More than 5 minutes
5.6%
More than 3 minutes,
but within 5 minutes
13.0%

Within 3 minutes
81.4%

More than 30 years
7.4%

Average*2
2.6
minutesWithin 15 years
51.7%

Less than 200 tsubos
26.8%

Average*2
16.2
years
More than 15 years,
but within 30 years
40.9%

400 tsubos or more
47.2%

Average*2
309.9
tsubos
200 tsubos or more,
but less than 300 tsubos
16.1%
300 tsubos or more, butless than 400 tsubos
9.9%

All Properties

All Properties*1. Calculated based on acquisition price of each property (rounded to one decimal place).
*2. Figures are the weighted average based on the acquisition prices (rounded to one decimal place).

Office Buildings Only
5

SANKEI REAL ESTATE Inc.

NAV per Unit*1 on Increase
NAV per Unit at the End of the 2nd FP Increased by 7,568 yen (+ 6.9%) from the End of the 1st FP to117,151 Yen(yen per unit)
120,000

117,151+6.9%+11.7%

110,000

100,000

109,583

98,10590,00080,000End of interim
period of 1st FP
第1期中間期末(End of April 2019)（2019年4月末）

Endof 1st FP
第1期末(End of August 2019)（2019年8月末）

End第2期末
of 2nd FP(End of February 2020)（2020年2月末）

NAV multiple*2*1. NAV per unit = (Net assets + Unrealized gain on appraisal basis) ÷ Number of investment units issued and outstanding*2. NAV multiple = Investment unit price (120,600 yen) on February 28, 2020, ÷ NAV per unit at the end of 2nd FP

1.0x

6

SANKEI REAL ESTATE Inc.

Internal Growth in 2nd Fiscal Period (Ended February 2020)
Portfolio Operated with 100% Occupancy Rate. Rent Revision for Office Buildings Produced Favorable
Results.
 Occupancy Rate (as of February 29, 2020)
Office buildings(9 properties)

Sub assets(2 properties)

Entire portfolio(11 properties)

100.0%
100.0%
100.0%* The figures are for the assets under management (11 properties in total).
* The occupancy rate indicates the occupancy rate of assets under management after considering SANKEIREAL ESTATE’s ownership interest (rounded to one decimal place).

 Rent Revision Performance of Office Buildings*1 (Based on Leased Area)(for lease agreements concluded between September 1, 2019, and February 29, 2020 (including new replacements))

Rent revision: 6 office buildings, 24 tenants(Leased area approx. 3,144 tsubos*2)
Decrease: 0.1%*3

Increase rate in
upward rent revision*4

Increase*4
20 contracts (approx. 2,155 tsubos)*2
Breakdown of upward rent revision

No change: 31.4%*3

Renewal with revision/renewal
18 contracts (approx. 2,026 tsubos)*2(Percentage*5 94.0%)+27.4%

New replacements
2 contracts (approx. 128 tsubos)*2(Percentage*5 6.0%)+20.0%＋27.1%

Increase: 68.5%*3*1. “Office buildings” refers to 9 office properties among the assets under management for the 2nd FP.
*2. The leased areas of assets under management after considering SANKEI REAL ESTATE’s ownership interest (rounded down to the nearest whole number).
*3. These are the percentages when the area leased to tenants who had rent revisions (including new replacements) (approx. 3,144 tsubos) is deemed 100%.
*4. Based on the actual rent taking into account free rent and rent-holiday services.
*5. These are the percentages when the area leased to tenants who had upward rent revisions (approx. 2,155 tsubos) among tenants who had rent revisions(including new replacements) is deemed 100%.

7SANKEI REAL ESTATE Inc.

Financial Summary for 2nd Fiscal Period (Ended February 2020)
Distribution per Unit Was 2,995 Yen, Up 306 Yen (+11.4%) from the Initial Forecast
Accounting period

Major Factors for the Difference

2nd FP
Results (B)

2nd FP
Forecasts (A)Difference (B)-(A)Announced on October 2019

2nd FP Results(compared with 2nd FP forecasts)

Operating revenue

1,951 million yen

1,933 million yen❶ -18 million yen

Operating expenses

850 million yen

767 million yen-83 million yen

Expenses related to leasing
business [Total]

645 million yen

577 million yen❷ -68 million yen

Outsourcing expenses

161 million yen

167 million yen

6 million yen❷ Expenses related to leasing business -68

Utilities expenses

122 million yen

126 million yen

4 million yen

Repair expenses

63 million yen

46 million yen-17 million yen• Outsourcing expenses +6(Inclusion of transferred PM fee +28,
BM fee -22)

Property taxes

23 million yen－-23 million yen• Utilities expenses +4

Depreciation

217 million yen

215 million yen-2 million yen• Repair expenses -17(Decrease due to rent reduction, deferral, etc.)

Other expenses

56 million yen

21 million yen-35 million yen

Other than expenses related
to leasing business [Total]

205 million yen

189 million yen❸ -16 million yen

Asset management fee

135 million yen

139 million yen

4 million yen

Other expenses

69 million yen

50 million yen-19 million yen

1,100 million yen

1,166 million yen

66 million yen－

0 million yen

0 million yen

Non-operating expenses

140 million yen

97 million yen❹ -43 million yen

Ordinary profit

960 million yen

1,069 million yen

109 million yen

Net profit

959 million yen

1,068 million yen

109 million yen

2,689 yen

2,995 yen

306 yenOperating profit
Non-operating income

Distribution per unit
* Figures are rounded down to the indicated digits.

❶ Operating revenue -18• Utilities reimbursement -8• Other revenue -5(million yen)

• Property taxes -23(Recorded 2-month fee for properties acquired in
the 2nd FP →0)• Other expenses -35(Recorded PM fee in Outsourcing expenses -28,
Other expenses -7)❸ Other than expenses related to leasing
business -16• Other expenses -19(Decrease in IR expenses for settlement, unused
reserve, etc.)❹ Non-operating expenses -43• Investment unit issuance expenses -30• Borrowing related expenses -14• Other +2

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SANKEI REAL ESTATE Inc.

Earnings Forecasts for 3rd Fiscal Period (Ending August 2020)

Accounting period

2nd FP(ended Feb. 2020)
Results (A)

3rd FP(ending Aug. 2020)
Forecasts (B)

4th FP(ending Feb. 2021)
Forecasts (C)3rd FP Forecasts(compared with 2nd FP)

Operating revenue

1,933 million yen❶ 1,999 million yen

Operating expenses

767 million yen

1,076 million yen

1,099 million yen

Expenses related to leasing
business [Total]

577 million yen

828 million yen

850 million yen

Outsourcing expenses

167 million yen❷ 186 million yen

185 million yen

Utilities expenses

126 million yen

136 million yen

135 million yen

Repair expenses

46 million yen

45 million yen❸ 65 million yen

Property taxes－❸ 220 million yen

220 million yen

Depreciation

215 million yen

220 million yen

224 million yen

Other expenses

21 million yen

18 million yen

19 million yen

Other than expenses related
to leasing business [Total]

189 million yen

247 million yen

249 million yen

Asset management fee

139 million yen❹ 179 million yen

177 million yen

4th FP Forecasts(compared with 3rd FP)

Other expenses

50 million yen

67 million yen

72 million yen❶ Increase in rental revenue due to the contribution from

1,166 million yen

923 million yen

945 million yen

Non-operating income

0 million yen

0 million yen

0 million yen

Non-operating expenses

97 million yen

93 million yen

82 million yen

Ordinary profit

1,069 million yen

830 million yen

862 million yen

Net profit

1,068 million yen

829 million yen

861 million yen

2,995 yen

2,324 yen

2,415 yen

Operating profit

Distribution per unit

❶ ❷ 2,045 million yen

Major Factors for the Difference❶ Increase in rental revenue due to an end of rent-free
periods of some tenants in March 2020
❷ Increase in outsourcing expenses (amount linked torevenue from PM fee and upward rent revision fee,etc.) due to the increase in rental revenue❸ Increase in property taxes due to recording of fixed
assets tax for assets acquired in the 1st and 2nd FP as
expenses❹ Increase in asset management fee due to the increasein asset balance at the end of the previous fiscal period

upward rent revision❷ Increase in rental revenue due to full contribution fromthe rental revenue of some tenants whose rent-free
period ends in the 3rd FP❸ Increase in repair expenses due to construction work
based on the repair plan

*1. Distribution per unit for the 3rd FP and after is under the assumption that there will be no change to the number of investment units issued and outstanding (356,800 units).
*2. No cash distribution in excess of earnings is planned to be made at this point in time.
*3. Figures are rounded down to the indicated digits.

9

SANKEI REAL ESTATE Inc.

Results and Forecasts of Distribution per Unit (1)(Unit: yen)

• Increase in revenue due toproperty acquisition• Decrease in non-operating
expenses (IPO, PO-related
expenses, etc.)

Increase (decrease) in operating income (loss) from leasing• End of rent-free periods of major tenants, etc. +229
• Recording of fixed assets tax -618
• Increase in outsourcing expenses -53

Decrease in revenue due to the spreadof the novel coronavirus infection(impact on stores, rental conference
rooms, utilities reimbursement)

Increase (decrease) in general andadministrative expenses/non-operatingbalance• Increase in general and administrative
expenses (recorded general meeting
expenses, etc.) -6• Decrease in non-operating expenses +28

-469
-151

-51

-42

Increase (decrease) in operating income(loss) from leasing• Contribution from upward rent revision,etc. +162• Increase in repair expenses -54

Increase (decrease) in general andadministrative expenses/nonoperating balance• Increase in asset management
fee -112

1st FP
Results

2nd FP
Results

3rd FP
Forecast

4th FP
Forecast
10SANKEI REAL ESTATE Inc.

Results and Forecasts of Distribution per Unit (2)In the 4th FP (Assumed Normal Operation Period), Steady Growth Is Expected Due to External
Growth and Steady Internal Growth
External growth effects mainly due toproperty acquisitions

Internal growth effects mainly due
to the increase in rental revenue

Decrease in revenue due to the spread of the novel
coronavirus infection (impact on sales of stores and rental
conference rooms, as well as utilities reimbursement)(Unit: yen)

+8.1%
+6.2%

+1.7%

2,995
2,689
2,414
2,223

Forecast
upon listing(Mar. 2019)

Forecast
upon 1st FP results
announcement(Oct. 2019)

2nd FP

Results
this time(Apr. 2020)

Forecast
upon listing(Mar. 2019)

2,358

2,324

Forecast
upon 1st FP results
announcement(Oct. 2019)

Forecast
this time(Apr. 2020)

3rd FP

2,235

Forecast
upon listing(Mar. 2019)

2,374

2,415

Forecast
upon 1st FP results
announcement(Oct. 2019)

Forecast
this time(Apr. 2020)

4th FP(assumed normal operation period)

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SANKEI REAL ESTATE Inc.

2. Future Growth Strategies

12

SANKEI REAL ESTATE Inc.

2-1 External Growth Strategy (1)Seeking External Growth Opportunities While Carefully Assessing Real
Estate Investment Market Conditions, Etc. Without Changing the Policy
to Expand Asset Size.

Aim for inclusion in
global indexes

Preparatory steps toapproach European
investors

February 2020
AIFMD registration<Target asset size>
200 billion yen to
300 billion yen<Target asset size>
100 billion yen

FTSE EPRA/Nareit
Global Real Estate Index
FTSE Global All Cap Index

Launch a move toobtain credit rating

67.3 billion yen

End第2期末
of 2nd FP

Short-term
短期目標target* Asset size is based on acquisition price.
* The short-term and mid-term asset size targets above are solely the targets, and neither the achievement of the targets itself nor the timing ofachievement is definite or guaranteed.
Furthermore, the timing of achievement of the targets may be delayed due to changes in the investment environment, real estate market
conditions, etc. and other reasons.

Mid-term
中期目標target

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SANKEI REAL ESTATE Inc.

2-1 External Growth Strategy (2)Sponsor’s Office Building Pipeline (part)
Hareza Tower (under development): Scheduled to be completed in May 2020
Hareza Tower(office tower)
Overview
Location

Higashi-Ikebukuro, Toshima-ku, Tokyo

Slated completion

May 2020

Total floor area

Approx. 68,600 m²

Number of floors

33 floors above ground and2 floors below groundOtemachi Financial City
North Tower

S-GATE HATCHOBORI

Overview

Development project /Owned property

1
2
3
4
5
6
7
8
9
10
11

Overview

Location

Otemachi, Chiyoda-ku, Tokyo

Location

Hatchobori, Chuo-ku, Tokyo

Year of completion

2012

Year of completion

2020

Total floor area

Approx. 110,000 m²

Total floor area

3,920.06 m²

Number of floors

31 floors above ground, 4 floors below
ground and 2-story penthouse

Number of floors

10 floors above ground

Location

Year ofcompletion

Development Operation and managementby sponsor
by sponsor group

Tokyo Sankei Building

Otemachi, Chiyoda-ku

2000

●

●

BREEZÉ TOWER

Umeda, Kita-ku, Osaka-shi

2008

●

●

JA Building

Otemachi, Chiyoda-ku

2009

●

●

Keidanren Kaikan

Otemachi, Chiyoda-ku

2009

●

Otemachi Financial City North Tower

Otemachi, Chiyoda-ku

2012

●

Tokyo Tokiwabashi 2027

Otemachi, Chiyoda-ku(Under development)●

S-GATE AKASAKA

Akasaka, Minato-ku

Hareza Tower

Higashi-Ikebukuro, Toshima-ku

S-GATE AKASAKA SANNOS-GATE OTEMACHI-KITA
X-PRESS YURAKUCHO BLDG.

Acquired assets

●

2015

●

●

(Under development)●●

Akasaka, Minato-ku

2016

●

●

Uchi-Kanda, Chiyoda-ku

2017

●

●

Yurakucho, Chiyoda-ku

2017

●

●

Development project /Owned property

12
13
14
15
16
17
18
19
20
21
22

Location

Year ofcompletion

Development Operation and managementby sponsor
by sponsor group

S-GATE AKIHABARA

Higashi-Kanda, Chiyoda-ku

2017

●

●

S-GATE NIHONBASHI-HONCHO

Nihonbashi-Honcho, Chuo-ku

2018

●

●

S-GATE HATCHOBORI

Hatchobori, Chuo-ku

2020

●

●

Hibiya Sankei Building

Yurakucho, Chiyoda-ku

1992

●

Hatchobori Sankei Building

Hatchobori, Chuo-ku

1965

●

Omotesando Sankei Building

Kita-Aoyama, Minato-ku

1994

●

Toyo Park Building

Toyo, Koto-ku

1991

Shinagawa Seaside TS Tower

Higashi-Shinagawa, Shinagawa-ku

2003

Omori Park Building

Omori-Honcho, Ota-ku

Namba Sankei Building

Minatomachi, Naniwa-ku, Osaka-shi

Honmachi Sankei Building

Honmachi, Chuo-ku, Osaka-shi

●

1993
2005

●

●

(Under development)

●

●

14

SANKEI REAL ESTATE Inc.

2-2 Internal Growth Strategy (1)Continue to Focus on Realizing Internal Growth to Reduce Rent Gap Even When the External
Environment Is Uncertain
 Rent Gap*1 (for typical floorplate) Status of Progress and Schedule of Contract
Revision/Renewal (as of February 29, 2020)

9 office properties-14.4%(tsubos)-15.9%

xxxxxx As of March 31, 2020

As of September 30, 2019

6,000

Contract Revision/Renewal (Planned) Area (Ratio to Total Leased Area)
Progress Rate of Contract Revision/Renewal

5,000

4,969
(34.3%)(on total rent basis; weighted average)

As of September 30, 2019

As of March 31, 2020

4,000

0%
3,000

-5%

-14.4%-10%-15.9%

2,000

-15%

1,000

-20%

0

1,906
(13.2%)

80.0%
0.1%
3rd FP(ending August 2020)

4th FP(ending February 2021)*1. “Rent Gap” refers to the figure arrived at when the amount of difference between the *1. The leased area of the office buildings subject to “contract revision/renewal (planned) area” is theaverage rent for SANKEI REAL ESTATE’s office building portfolio and the market rent
figure corresponding to the ownership interest acquired by SANKEI REAL ESTATE in each property.
calculated based on assumed new contract rent (typical floorplate) as stated in a market *2. “Ratio to total leased area” is the value calculated by dividing the total leased area for each contract
report prepared by CBRE K.K. is divided by the market rent.
revision/ renewal period by the total leased area for each period, rounded to one decimal place.
*3. “Progress rate of contract revision/renewal” is the value calculated by dividing the total leased areafor lease contracts that have been concluded as of February 29, 2020, and whose revision/renewal
has been completed by the total leased area for each contract revision/renewal period, rounded to
one decimal place.

15

SANKEI REAL ESTATE Inc.

2-2 Internal Growth Strategy (2)Focus Properties in the 3rd Fiscal Period Onward (Understanding of Market and Leasing Policy)
Effects of novel coronavirus (COVID-19)
 Since SANKEI REAL ESTATE mainly owns office buildings in large cities such as Tokyo and Osaka, there is still demand for office bases fromtenants, and the likelihood of being immediately affected by the spread of the novel coronavirus infection is low at this point in time.
 On the other hand, SANKEI REAL ESTATE has received requests for rent reduction and respite for rent payment from some tenants due tothe novel coronavirus infection.

BREEZÉ TOWER
Shinagawa Seaside TS Tower

Focused Property

 The market of the Higashi-Shinagawa area where theproperty is located is favorable. As the market sees a tightsupply-demand balance, rent is on an upward trend
compared with before.
 Negotiations are underway by assuming upward rent revisionin consideration of the current market environment as well as
the advantage of being an office building with rare value anda leased floor area of more than 10,000 tsubos.

S-GATE AKIHABARA

Focused Property

 The market of the Iwamotocho and Higashi-Kanda area
where the property is located is strong. As the market
sees a tight supply-demand balance, rent is on an upward
trend compared with before.
 While there are many old, small and medium-sizedbuildings in the area, we are promoting the attractivenessof the property’s scarcity of having high specification andbeing relatively new. With such, we are putting efforts
into revising contracts to increase the rent of tenants
whose rent deviates from the market rent.

 The Umeda area where the property is located sees a tight supply-demand balance,with the solid tenant needs as the center of the Kansai business area due to progress in
new redevelopment projects and favorable accessibility as well as limited supply of
new office buildings.
 We will strive to negotiate upward rent revision, promoting the attractiveness of thebuilding carefully as a landmark of Nishi-Umeda against the backdrop of the favorable
market condition, while keeping a close watch on the status of competitive
neighboring properties.

Toyo Park Building The property enjoys strong needs since the Toyocho area where the property is
located offers excellent access to Otemachi and Nihombashi and the rent level remains
relatively low.
 With a declining trend in the occupancy rate of neighboring buildings, we will seek
opportunities to increase rent amidst careful negotiation.

Omori Park Building The market of the Omori area where the property is located is favorable. The supplydemand balance is likely to remain tight for the time being.
 Although tenant needs are high centering on those who emphasize use of cars andconvenient access to Haneda Airport based on the characteristics of the property’s
location, the rent revel remains rather low. We will negotiate upward rent revision,
showcasing the scarcity of the property which has over 300 tsubos of typical floorplate

16

SANKEI REAL ESTATE Inc.

2-3 Financial Strategy (1)Will Work to Promote the Extension of Average Remaining Time to Maturity, Improvement of the
Ratio of Fixed Interest Rate and Diversification of Maturity Date, While Maintaining a Stable
Financial Base Through Lender Composition Centering on Mega Banks.
 Financing Highlights (as of March 12, 2020)
Balance ofinterest-bearing liabilities

 LTV Ratio During Normal Operations

33.95
billion yen

LTV ratio*1

84.5%

Ratio offixed-rate debt

67.1%

0.34%

Averageremaining time to maturity

2.8 years

Ratio oflong-term debt*2
Averagefinancing interest rate*3

44.6%

End of 2nd FP

End of 3rd FP

End of 4th FP

44.6%

45.0%
(Forecast)

44.9%(Forecast)LTV** A portion (456 million yen) of borrowings is assumed to be repaid early using the refund of
consumption taxes to be received as the source of funds for the repayment.

*1. “LTV ratio” is total interest-bearing liabilities divided by total assets, rounded to one decimal place.
*2. “Long-term debt ” used in the calculation of the “Ratio of long-term debt” does not include longterm borrowings due within one year.
*3. “Average financing interest rate” is the average of applicable interest rates at March 12, 2020.
Calculations are on an interest payable basis and do not include arrangement fee and otherborrowing related expenses.

 Change in Ratio of Fixed Interest Rate and Average
67.1%
Remaining Time to Maturity
Ratio of fixedinterest rate
54.5%
2.8
years
2.3
years

 Maturity Ladder for Interest-Bearing Liabilities(as of March 12, 2020)
Refinanced 4.3 billion yen of short-term borrowings (floating interest rate)
due for repayment on March 12, 2020, with long-term borrowings (term 4.5
years, fixed interest rate)(million yen)
6,000

Refinancing

5,000

End of 2nd FP(February 29, 2020)

After refinancing(March 12, 2020)

 Lender Composition
Established stable bank formation through financing from 7 leading financial
institutions of Japan
Resona Bank, Ltd.
2,780 million yen
Shinsei Bank, Limited
2,780 million yen

Existing borrowings

Average remaining
time to maturity

Mizuho Bank, Ltd.
9,404 million yen

Sumitomo Mitsui Trust Bank, Ltd.
3,200 million yen

4,000
3,000

Mizuho Trust & Banking Co., Ltd.
3,540 million yen

2,000

Development Bank of Japan Inc.
5,600 million yen

1,000
0

3rd FP

4th FP

5th FP

6th FP

7th FP

8th FP

9th FP 10th FP 11th FP 12th FP

Sumitomo Mitsui Banking
Corporation
6,652 million yen

17

SANKEI REAL ESTATE Inc.

2-3 Financial Strategy (2)Status of Lenders (as of March 12, 2020)
LenderMizuho Bank, Ltd.

304

Sumitomo Mitsui Banking Corporation

152

Sub totalInterest
rate*1Maturity
date*2

Repayment
method

0.22909%(floating)Sep. 3,2020

Lump-sum
repayment atmaturity

Description

Term

UnsecuredNon-guaranteed

LenderBorrowingamount(million yen)Mizuho Bank, Ltd.

856

Sumitomo Mitsui Banking Corporation

639

456

Development Bank of Japan Inc.

548

1,331

Mizuho Trust & Banking Co., Ltd.

350

Sumitomo Mitsui Banking Corporation

929

Sumitomo Mitsui Trust Bank, Ltd.

319

Development Bank of Japan Inc.

796

Shinsei Bank, Limited

294

Mizuho Trust & Banking Co., Ltd.

509

Sumitomo Mitsui Trust Bank, Ltd.

Mizuho Bank, Ltd.

Long-term borrowings

Borrowingamount(million yen)

0.24409%(floating)Mar. 12,
2021

Resona Bank, Ltd.

294

465

Mizuho Bank, Ltd.

2,250

Shinsei Bank, Limited

385

Sumitomo Mitsui Banking Corporation

1,500

Resona Bank, Ltd.

385

Mizuho Trust & Banking Co., Ltd.

620

Mizuho Bank, Ltd.

1,574

Sumitomo Mitsui Trust Bank, Ltd.

550

Sumitomo Mitsui Banking Corporation

1,084

Shinsei Bank, Limited

490

Resona Bank, Ltd.

490

Mizuho Bank, Ltd.

950

Development Bank of Japan Inc.

929

Mizuho Trust & Banking Co., Ltd.

593

Sumitomo Mitsui Trust Bank, Ltd.

542

Shinsei Bank, Limited

439

Resona Bank, Ltd.

0.36969%(fixed)Mar. 12,2022

Lump-sum
repayment atmaturity

UnsecuredNon-guaranteed

Long-term borrowings

Short-termborrowings

Term

Sumitomo Mitsui Banking Corporation

2,000

439

Mizuho Trust & Banking Co., Ltd.

620

Mizuho Bank, Ltd.

972

Sumitomo Mitsui Trust Bank, Ltd.

550

Sumitomo Mitsui Banking Corporation

716

Shinsei Bank, Limited

490

Development Bank of Japan Inc.

614

Resona Bank, Ltd.

490

Mizuho Trust & Banking Co., Ltd.

392

Mizuho Bank, Ltd.

1,167

Sumitomo Mitsui Trust Bank, Ltd.

358

Sumitomo Mitsui Banking Corporation

832

Shinsei Bank, Limited

324

Development Bank of Japan Inc.

713

Resona Bank, Ltd.

324

Mizuho Trust & Banking Co., Ltd.

456

Sumitomo Mitsui Trust Bank, Ltd.

416

Shinsei Bank, Limited

358

Mar. 12,2023

Resona Bank, Ltd.

*1. Interest rates indicated are the applicable interest rates as of March 12, 2020.
*2. If the maturity date is not a business day, it will be the following business day.

Maturity
date*20.49096%(fixed)Mar. 12,2024

0.26909%(floating)Sep. 3,2022

Repayment
methodDescription

Lump-sum
repayment atmaturity

UnsecuredNon-guaranteed

800

Development Bank of Japan Inc.

0.42346%(fixed)Interest
rate*1

0.36200%(fixed)Sep. 3,2023

0.32923%(fixed)Sep. 12,2024

358

Sub total

33,500Total

33,95618

SANKEI REAL ESTATE Inc.

2-4 ESG Initiatives
Environment / Social
Contribute to environmental consideration and revitalization of local communities in cooperation with relatedparties including sponsors
Wall greening(BREEZÉ TOWER)

Community cycle(Tokyo Sankei Building)Jump rope competition(Tokyo Sankei Building)Governance: BCP (Business Continuity Plan)
Sankei Building Asset Management Co., Ltd., which is the asset management company of SANKEI REAL ESTATE,
strives to stabilize its asset management business and secure trust of customers by appropriately taking steps tomitigate damage and continue business not only by itself but also in cooperation with the sponsor group, relatedparties and related organizations in the event of a disaster, accident, etc. that significantly affects business activities.
As a measure against the novel coronavirus (COVID-19), SANKEI REAL ESTATE will implement telework based on BCP,
and continue its asset management business while closely cooperating with related parties.

Started Preparations for Participation in GRESB (Planned in 3rd Fiscal Period)
SANKEI REAL ESTATE will start preparations to participate in GRESB Real Estate, a global investment benchmark.
GRESB was established as a tool to measure the environmental, social and governance (ESG) consideration ofcompanies and funds in the real estate sector and is used to select investment targets and engage in dialogue withinvestment targets.
19

SANKEI REAL ESTATE Inc.

Appendix

20

SANKEI REAL ESTATE Inc.

2nd Fiscal Period (Ended Feb. 2020) Balance Sheet (unabridged)(February 29, 2020)
Unit: thousand yen
AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Operating accounts receivable
Prepaid expenses
Consumption taxes receivable
Other
Total current assets
Non-current assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net
Structures
Accumulated depreciation
Structures, net
LandConstruction in progress
Buildings in trust
Accumulated depreciation
Buildings in trust, net
Structures in trust
Accumulated depreciation
Structures in trust, net
Machinery and equipment in trust
Accumulated depreciation
Machinery and equipment in trust, net
Tools, furniture and fixtures in trust
Accumulated depreciation
Tools, furniture and fixtures in trust , net
Land in trust
Construction in progress in trust
Total property, plant and equipment
Intangible assets
SoftwareTotal intangible assets
Investments and other assets
Long-term prepaid expenses
Deferred tax assets
Leasehold and guarantee deposits
Total investments and other assets
Total non-current assets
Total assets

3,778,564
3,099,144
64,006
41,198369,256
342,0737,694,243

159,569(5,519)154,050353(8)345
2,457,766
220
13,599,039(333,525)
13,265,513
22,236(514)
21,721
2,608
(77)
2,530
2,336
(224)
2,112
52,510,871
068,415,132(February 29, 2020)
Unit: thousand yen
Liabilities
Current liabilities
Operating accounts payable
Short-term borrowings
Accounts payable - otherAccrued expenses
Income taxes payable
Advances received
Deposits received
Total current liabilities
Non-current liabilities
Long-term borrowings
Leasehold and guarantee deposits received
Leasehold and guarantee deposits received in trust
Total non-current liabilities
Total liabilities
Net assets
Unitholders’ equity
Unitholders’ capital
Surplus
Unappropriated retained earnings (undisposed loss)
Total surplus
Total unitholders’ equity
Total net assets
Total liabilities and net assets

144,640
4,756,000
160,972
24,874946
341,424
951,0036,379,861
29,200,000
91,8802,905,497
32,197,378
38,577,239

36,540,901
1,068,783
1,068,783
37,609,684
37,609,684
76,186,924

7,653
7,653
59,87816
10,00069,894
68,492,680
76,186,924

21

SANKEI REAL ESTATE Inc.

2nd Fiscal Period (Ended Feb. 2020) Statement of Income (unabridged)(From September 1, 2019 to February 29, 2020)
Unit: thousand yen

Operating revenue
Leasing business revenue
Other leasing business revenue
Total operating revenue

1,796,513
136,736
1,933,249

Operating expenses
Expenses related to leasing business

577,268

Asset management fee

139,263

Asset custody fee

1,420

Administrative service fees

7,320

Remuneration for directors (and other officers)

3,600

Other operating expenses

38,333

Total operating expenses
Operating profit

767,204
1,166,045

Non-operating income
Interest income

30Interest on refund

778

Total non-operating income

808

Non-operating expenses
Interest expenses

56,039Borrowing related expenses

26,581

Investment unit issuance expenses

12,502

Other

2,000

Total non-operating expenses

97,123

Ordinary profit

1,069,729

Net profit before income taxes

1,069,729

Income taxes – current
Income taxes – deferred
Total income taxes
Net profit
Retained earnings brought forward
Unappropriated retained earnings (undisposed loss)

950
4
955
1,068,774
8
1,068,783

22

SANKEI REAL ESTATE Inc.

2nd Fiscal Period (Ended Feb. 2020) Statement of Cash Flows(From September 1, 2019 to February 29, 2020)
Unit: thousand yen
Cash flows from operating activities
Net profit before income taxes
Depreciation
Investment unit issuance expenses
Interest income
Interest expenses
Decrease (increase) in operating accounts receivable
Decrease (increase) in consumption taxes refund receivable
Decrease (increase) in prepaid expenses
Increase (decrease) in operating accounts payable
Increase (decrease) in accounts payable – other
Increase (decrease) in advances received
Increase (decrease) in deposits received
Decrease (increase) in long-term prepaid expenses
Decrease (increase) in other assets
SubtotalInterest received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of property, plant and equipment in trust
Proceeds from leasehold and guarantee deposits received
Refund of leasehold and guarantee deposits received
Proceeds from leasehold and guarantee deposits received in trust
Refund of leasehold and guarantee deposits received in trust
Net cash provided by (used in) investing activities
Cash flows from financing activities
Proceeds from short-term borrowings
Repayments of short-term borrowings
Proceeds from long-term borrowings
Proceeds from issuance of investment units
Distribution paid
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

1,069,729
216,818
12,502(30)
56,039264,097
264,614(3,188)(244,671)(17,959)
164,823
750,659(19,491)(341,646)
2,172,297
30(47,352)(1,351)2,123,623(22,088)(24,360,331)
1,017
(217)
1,012,067(18,904)(23,388,457)
1,056,000(1,213,736)
11,800,000
13,403,498(334,117)
24,711,645
3,446,811
3,430,897
6,877,708

23

SANKEI REAL ESTATE Inc.

Key Performance Indicators (KPIs)
FP ended Feb.
2020
LTV

NOI yield

FP ended Feb.
2020

(against total assets)

44.6%

Distribution per unit

2,995 yen(against total assets <considering unrealized gain/loss>)

42.3%

Distribution yield

5.0%(against book value)

4.6%

ROE

5.7%

(against appraisal value)

4.3%

Net assets per unit

105,408 yen

NOI yield
after
depreciation(against book value)

4.0%

NAV per unit

117,151 yen(against appraisal value)

3.7%

Investment unit price (at end of period)

120,600 yen

Implied cap
rate(NOI yield)

4.3%

NAV multiple

1.0x(NOI yield after depreciation)

3.7%

PBR

1.1x

FFO

1,284 million yen

PER

20.1x

AFFO

1,214 million yen

FFO multiple

FFO per unit

3,600 yenEPS2,995 yen

*1. LTV (against total assets) = Interest-bearing liabilities / Total assets (book value)
LTV (against total assets <considering unrealized gain/loss>) = Interest-bearing liabilities /(Total assets (book value) + unrealized gain/loss)*2. NOI yield (against book value) = (Operating income from real estate leasing + Depreciation) /Book value of real estate for lease
NOI yield (against appraisal value) = (Operating income from real estate leasing +Depreciation) / Appraisal value of real estate for lease*3. NOI yield after depreciation (against book value) = Operating income from real estate leasing /Book value of real estate for lease
NOI yield after depreciation (against appraisal value) = Operating income from real estateleasing / Appraisal value of real estate for lease*4. Implied cap rate (NOI yield) = NOI (Annualized result of current FP x 2) / (Total fair value +Interest-bearing liabilities – Cash and deposits + Leasehold deposits received)
Implied cap rate (NOI yield after depreciation) = NOI after depreciation (Result of current FP x2) / (Total fair value + Interest-bearing liabilities – Cash and deposits + Leasehold deposits
received)*5. FFO = Net profit + Depreciation – Gain/loss on sales of real estate properties (including loss onretirement of non-current assets)*6. AFFO = FFO – Capital expenditure*7. FFO per unit = FFO / Total number of investment units issued and outstanding at end of period*8. EPS = Net profit / Total number of investment units issued and outstanding at end of period

Payout ratio

16.8x
(FFO)

83.2%

(AFFO)

88.0%*9. Distribution per unit = Total distribution / Total number of investment units issued andoutstanding at end of period*10. Distribution yield = Distribution per unit (Annualized result of current FP x 2) / Investment
unit price (at end of period)*11. ROE (Return on equity) = Net profit (Annualized most recent result x 2) / Net assets*12. NAV per unit = (Net assets + Unrealized gain/loss) / Total number of investment units
issued and outstanding at end of period*13. NAV multiple = Investment unit price (at end of period) / NAV per unit
*14. PBR (Price Book-value Ratio) = Investment unit price (at end of period) / Net assets per unit
*15. PER (Price Earnings Ratio) = Investment unit price (at end of period) / EPS (Annualized mostrecent result x 2)
*16. FFO multiple = Investment unit price / FFO per unit (Annualized most recent result x 2)
*17. Payout ratio (FFO) = Total distribution / FFO*18. Payout ratio (AFFO) = Total distribution / AFFO.
*19. Figures are rounded down to the indicated digits. (Percentages and multiples are rounded
to one decimal place.)24

SANKEI REAL ESTATE Inc.

2nd Fiscal Period (Ended Feb. 2020) Statement of Income from Leasing by Property(Unit: thousand yen)

A-1

A-2

A-3

A-4

A-5

A-6

A-7

A-8

A-9

B-1

B-2

Asset type

Officebuildings

Officebuildings

Officebuildings

Officebuildings

Officebuildings

Officebuildings

Officebuildings

Officebuildings

Officebuildings

Sub assets

Sub assets

Property nameTokyo
Sankei
Building

BREEZÉTOWER

S-GATENIHONBASHI-HONCHO

S-GATEAKIHABARA

HibiyaSankei
Building

Hatchobori
Sankei
Building

ToyoPark Building

ShinagawaSeaside TS
Tower*1

Omori
Park Building

HotelIntergateTokyo
Kyobashi

HotelIntergate
Hiroshima

Leasing business revenue

66,182

481,323

90,67858,519204,660

171,163

110,157 Not disclosed

166,555

206,955

117,480

Rental revenue

56,410367,662

83,90255,532

178,562

140,970

77,617 Not disclosed

129,436

206,955

117,480

CAM revenue

2,635

87,027--

13,232

13,79019,788 Not disclosed

16,179--

Utilities reimbursement

5,313

19,338

4,405

2,571

9,792

8,525

10,279 Not disclosed

14,810

-

-

752

7,485

2,232

372

1,932

6,426

2,340 Not disclosed

5,340

-

-

1,069

(190)

137

44

1,140

1,451

132 Not disclosed

790

-

-

22,375

195,095

32,771

16,99736,09750,14029,736 Not disclosed

49,07928,87928,140Outsourcing expenses

6,043

65,273

7,414

5,475

16,257

17,5628,818 Not disclosed

15,994

1,200

1,780

Utilities expenses

3,891

37,428

5,937

2,708

9,699

10,9038,239 Not disclosed

16,267

-

-

683

1,131

-

-

-

-

- Not disclosed

-

-

-

3,458

26,943

521

359

4,640

5,447

2,197 Not disclosed

291

-

-

100

871

330

169

376

473

288 Not disclosed

506

607

502

-

250

250

250

250

250

350 Not disclosed

345

250

246

2,866

61,244

18,036

7,623

4,473

14,897

29,71815,212

26,77025,572

5,332

1,952

280

410

399

604

380 Not disclosed

461

51

39

43,806286,228

57,906

41,521

168,562

121,023

80,420171,620

117,475

178,076

89,33946,673

347,472

75,94349,145173,035

135,92189,883201,338

132,688

204,846

114,911

Parking revenue
Other rental revenue
Expenses from leasing

Land rent

Repair expenses
Insurance premium
Trust fee
Depreciation
Other expenses from leasing
Operating income (loss) fromleasing
NOI

9,462*1. The information is “Not disclosed” due to unavoidable circumstances in that such contains information for which consent for disclosure has not been obtained from the tenant, or other stakeholders orinformation from which confidential information can be derived.
*2. Figures are rounded down to the indicated digits.
25

SANKEI REAL ESTATE Inc.

Portfolio List (as of February 29, 2020)
Property number

A-1

A-2

A-3

A-4

A-5

A-6

A-7

A-8

A-9

B-1

B-2

Asset type

Officebuildings

Officebuildings

Officebuildings

Officebuildings

Officebuildings

Officebuildings

Officebuildings

Officebuildings

Officebuildings

Sub assets

Sub assets

Property nameTokyo
Sankei
Building

BREEZÉTOWER

S-GATENIHONBASHIHONCHO

S-GATEAKIHABARA

HibiyaSankei
Building

Hatchobori
Sankei
Building

ToyoPark Building

ShinagawaSeaside TS
Tower

Omori
Park Building

HotelIntergateTokyo
Kyobashi

HotelIntergate
Hiroshima(2% co-ownershipinterest)(45% quasi coownership interestin sectional
ownership of theoffice portion of
the building, etc.)(51% co-ownershipinterest)

Chiyoda-ku, Tokyo

Kita-ku, Osaka-shi

Chuo-ku, Tokyo

Chiyoda-ku, Tokyo

Chiyoda-ku, Tokyo

Chuo-ku, Tokyo

Koto-ku, Tokyo

Shinagawa-ku,
Tokyo

Ota-ku, Tokyo

Chuo-ku, Tokyo

Naka-ku,
Hiroshima-shi

Acquisition dateMar. 12, 2019

① Mar. 12, 2019
② Sep. 3, 2019

Mar. 12, 2019

Mar. 12, 2019

Mar. 12, 2019

Mar. 12, 2019

Mar. 12, 2019

Sep. 3, 2019

Sep. 3, 2019

Mar. 12, 2019

Sep. 3, 2019

Acquisition price

2,509 million yen

13,100 million yen

6,698 million yen

2,055 million yen

5,829 million yen

4,959 million yen

3,782 million yen

10,040 million yen

5,400 million yen

8,961 million yen

3,990 million yen

Appraisal value

2,690 million yen

14,715 million yen

7,440 million yen

2,220 million yen

6,530 million yen

5,570 million yen

3,940 million yen

10,600 million yen

5,620 million yen

9,140 million yen

4,140 million yen

2.8%

4.7%

3.7%

3.9%

3.7%

5.1%

4.4%

4.1%

4.2%

3.9%

4.9%

Construction completion

Sep. 2000

Jul. 2008

Oct. 2018

Sep. 2017

Jun. 1992

Sep. 1965

Jun. 1991

Jul. 2003

May 1993

Jan. 2018

Oct. 2018

Occupancy rate

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

2.3%

2.8%

2.0%

2.2%

3.1%

0.3%

9.0%

3.2%

5.6%

1.8%

2.1%

Location

Appraisal NOI yield(Appraisal NOI/Acquisition price)(as of February 29, 2020)

PML value(25% quasi coownership interestin sectional
ownership of thebuilding, etc.)* The first acquisition of BREEZÉ TOWER was made on March 12, 2019, and the second acquisition on September 3, 2019.

Portfolio PML value(11 properties)

1.6%
26

SANKEI REAL ESTATE Inc.

Overview of Appraisal Value at the End of 2nd Fiscal Period(Unit: million yen)
Property
number

Property nameAcquisition
priceBook value atthe end of
2nd FPAt acquisition*1(a)Appraisalvalue

End of 2nd FP*2
(February 29, 2020) (b)*3CRAppraisal
value

*3

CR

Change(b)－(a)Appraisal
CR*3
value

Unrealized gain/
loss

A-1

Tokyo Sankei Building(2% co-ownership interest)

2,509

2,612

2,540

2.6%

2,690

2.5%

150

-0.1%

77

A-2

BREEZÉ TOWER(45% quasi co-ownership interest in sectional
ownership of the office portion of the building, etc.)

13,10013,217

13,905

3.9%

14,715

3.8%

810

-0.1%

1,497

A-3

S-GATE NIHONBASHI-HONCHO(51% co-ownership interest)

6,698

6,761

6,780

3.7%

7,440

3.3%

660

-0.4%

678

A-4

S-GATE AKIHABARA

2,055

2,074

2,080

3.8%

2,220

3.5%

140

-0.3%

145

A-5

Hibiya Sankei Building

5,829

6,040

5,900

3.3%

6,530

3.0%

630

-0.3%

489

A-6

Hatchobori Sankei Building

4,959

5,036

5,020

4.2%

5,570

4.1%

550

-0.1%

533

A-7

Toyo Park Building

3,782

3,897

3,790

4.2%

3,940

4.0%

150

-0.2%

42

A-8

Shinagawa Seaside TS Tower(25% quasi co-ownership interest in sectional
ownership of the building, etc.)

10,040

10,182

10,2003.6%

10,600

3.6%

400

0.0%

417

A-9

Omori Park Building

5,400

5,508

5,600

3.9%

5,620

3.8%

20

-0.1%

111

Office buildings subtotal (total of 9 properties)

54,37455,33055,81559,325

3,510

3,994

B-1

Hotel Intergate Tokyo Kyobashi

8,961

9,058

9,070

3.8%

9,140

3.7%

70

-0.1%

81

B-2

Hotel Intergate Hiroshima

3,990

4,026

4,080

4.6%

4,140

4.5%

60

-0.1%

113

Sub assets subtotal (total of 2 property)

12,951

13,084

13,15013,280130

195

Portfolio total (total of 11 properties)

67,32568,414

68,96572,605

3,640

4,190

*1. The appraisal value with October 31, 2018, as the appraisal date is indicated for A-1, A-3 to A-7 and B-1, appraisal value with July 1, 2019, as theappraisal date for A-8, A-9 and B-2, and the total appraisal value with October 31, 2018, and July 1, 2019, as the appraisal date for A-2.
*2. The appraisal value with February 29, 2020, as the appraisal date.
*3. CR is a cap rate based on direct capitalization method (NCF basis). For the CR at the time of acquisition of BREEZÉ TOWER, the weighted averagebased on each acquisition price of the quasi co-ownership interest in sectional ownership of the office portion of the building, etc. acquired on
March 12, 2019, and September 3, 2019, is stated.

27

SANKEI REAL ESTATE Inc.

Top End Tenants by Leased Area (as of March 31, 2020)
Name of end tenant
GRANVISTA Hotels & Resorts Co., Ltd.

Business type
Hotel

Total leased area(m²)

% of portfolio’s
total leased area

15,166.7

24.1%

Property name
Hotel Intergate Tokyo Kyobashi
Hotel Intergate Hiroshima

Sony Corporation

Manufacturing

Not disclosed

Not disclosed

Shinagawa Seaside TS Tower

Bayer Yakuhin, Ltd.

Manufacturing(pharmaceutical)

Not disclosed

Not disclosed

BREEZÉ TOWER

NH Foods Ltd.

Manufacturing(food)

Not disclosed

Not disclosed

BREEZÉ TOWER

Konoike Construction Co., Ltd.

Construction

2,542.7

4.0%

S-GATE NIHONBASHI-HONCHO

Hitachi Global Life Solutions, Inc.

Service(equipment maintenance)

2,423.0

3.8%

Toyo Park Building

Toyo Sangyo Co., Ltd.

Service(equipment maintenance)

1,509.7

2.4%

Omori Park Building

NEC Facilities, Ltd.

Service(facility management)

1,429.4

2.3%

Omori Park Building

Not disclosed

Not disclosed

Yokogawa Solution Service Corporation

Service(equipment maintenance)

BREEZÉ TOWERSEGA Holdings Co., Ltd.

Manufacturing(game)

1,131.0

1.8%

Omori Park Building

Daiichi Techno Co., Ltd.

Service(equipment maintenance)

1,131.0

1.8%

Omori Park Building* “Total leased area” and “% of portfolio’s total leased area” are based on figures after considering SANKEI REAL ESTATE’s ownership interest.
* “% of portfolio’s total leased area” refers to the total leased area expressed as a percentage of the entire portfolio’s total leased area, rounded to one decimal place.
* With regard to “Total leased area” and “% of portfolio’s total leased area,” for properties for which Sankei Building is the master lessee, the areas stated in the lease agreements which Sankei Building(the master lessee) has concluded with end tenants are used as areas leased to the end tenants when calculating.
* The information is “Not disclosed” due to unavoidable circumstances in that such contains information for which consent for disclosure has not been obtained from the tenant, relevant party, etc. or
information from which confidential information can be derived.

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SANKEI REAL ESTATE Inc.

Status of Lease Agreements (as of March 31, 2020; based on leased area after considering ownership interest)
Breakdown of Tenants by Contract FormBreakdown of Tenants by Lease Period(including hotels)

Ordinary building
lease agreement

Less than 3 years

10 years or more
28.5%

33.1%

29.7%

Average*1

7.8 years
15.8%

66.9%
Fixed-term building
lease agreement

Breakdown of Tenants by Business TypeTransportation & communications 3.1%
Wholesale & retail 3.7%
IT 4.9%Construction &real estate 6.5%

 Hitachi Global Life
Solutions Toyo Sangyo
 NEC Facilities
Etc.

5 years or more,
but less than 10 years

Breakdown of Tenants by Lease Period(excluding hotels)
10 years or more

Other 2.8%

7.4%
Manufacturing
38.0%

 Sony Bayer Yakuhin
 NH Foods

Less than 3 years
Etc.

Service

3 years or more,
but less than 5 years

26.0%

17.0%

37.6%

Average*1

20.8%

5 years or more,
but less than 10 years

3.9 years
34.2%

24.1%
Hotel

3 years or more,
but less than 5 years

 GRANVISTA Hotels & Resorts(100% subsidiary of Sankei Building)*1. Figures are the weighted average based on the area leased to each tenant.
*2. As to the calculation of each ratio indicated above, for properties for which Sankei Building is the master lessee, the areas stated in the leaseagreements which Sankei Building (the master lessee) has concluded with end tenants are used as areas leased to the end tenants when calculating.

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SANKEI REAL ESTATE Inc.

Status of Unitholders
Breakdown of Investment Units by
Unitholder Type
Financial institutions

Securities companies

Non-Japanese corporations, etc.

Major Unitholders (as of February 29, 2020)
Name of unitholder

Other Japanese corporations

Individuals/Other

Number ofunits owned(units)Share ofunits owned(%)

The Master Trust Bank of Japan, Ltd.
(trust account)

75,419

21.13

Japan Trustee Services Bank, Ltd.
(trust account)

61,708

17.29

Trust & Custody Services Bank, Ltd.
(securities investment trust account)

28,534

7.99

The Nomura Trust and Banking Co., Ltd.
(Investment Trust Account)

17,339

4.85

The Sankei Building Co., Ltd.

11,362

3.18

SIX SIS LTD.

5,784

1.62

STATE STREET BANK AND TRUST COMPANY
505012

5,571

1.56

End of 1st FP

End of 2nd FP

STATE STREET BANK AND TRUST COMPANY
505223

5,511

1.54

End of 1st FP

End of 2nd FP

NATIONAL AUSTRALIA BANK LIMITED - UBS
CLARION GLOBAL PROPERTY SECURITIES FUND

4,782

1.34

55
19
127
62
7,585

Trust & Custody Services Bank, Ltd.
(money trust tax account)

4,660

1.30

Individuals/Other

37
17
116
57
6,399

220,670

61.84

Total

6,626

7,848

[Number of Unitholders]
Financial institutions
Securities companies
Other Japanese corporations
Non-Japanese corporations, etc.

Total

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SANKEI REAL ESTATE Inc.

Profile of the Asset Management Company
Trade name

Sankei Building Asset Management Co., Ltd.

Established

April 13, 2018

Capital

100 million yen

Shareholder composition

The Sankei Building Co., Ltd. 100%

Main line of business

Investment management businessDirectors and auditors

5 directors and 1 auditor

Financial instruments businessregistration

Director-General of the Kanto Local Finance Bureau
Registration (FIBO) No. 3094

Real estate brokerage license

Governor of Tokyo License (1) No. 102209

Discretionary transaction agency,
etc. approval

Minister of Land, Infrastructure, Transport andTourism Approval No. 125

General Meeting of Shareholders
AuditorBoard of Directors
Investment Committee

Compliance Committee
President and CEO
Compliance Office

Investment Management Department

Finance & IR Department• Investment policy planning• Acquisition and sale of assets undermanagement• Corporate planning, accounting andgeneral affairs• Operation and management ofassets under management• Financials and IR

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